U.S. Stocks Add to Rally Ahead of Tax Plan Amid Earnings Pickup

U.S. stocks climbed, following a global equity rally on Monday, as investors assessed corporate earnings and awaited a tax plan from the White House scheduled for Wednesday.

The S&P 500 added 0.6 percent to 2,388.61 at 4 p.m. in New York. The benchmark is up 1.7 percent across back-to-back gains for the biggest two-day rally since the U.S. election. The Dow Jones Industrial Average was up 1.1 percent to 20,996.12 on Tuesday.

  • Russell 2000 Index climbed for sixth day in past seven
  • Materials shares up 1.6% as Bloomberg Commodity Index snaps six-day losing streak
    • Freeport-McMoRan rose 7.1% and DuPont added 3.6%
  • Financial stocks up 0.8% as Wells Fargo and Morgan Stanley add at least 1.6%
  • Utility and telecom shares little changed or down; 10-year yield about 6 bps higher
  • Volume in S&P 500 16% above 30-day average at this time; about 7.3 billion shares traded hands on all U.S. exchanges, compared with 6.9 billion one-year average
    • Volume movers: Express Scripts (ESRX), Ryder System (R), CR Bard (BCR), Laboratory Corp (LH), all traded at volume at least 3x 30-day average
  • VIX swings to loss, down to 10.8
    • Volatility movers: Vornado Realty (VNO), Dover (DOV), Dominion Resources (D) have highest put/call volume ratio in S&P 500
  • U.S. equities remain a “relative safe-haven” in a low return world, though reflation risks remain, HSBC analysts led by Ben Laidler wrote in a report
  • POLITICS:
    • Republicans voiced relief Tuesday that President Donald Trump appears to be retreating from a government shutdown fight by relenting on his demand that Congress immediately start funding a border wall
    • Investors are awaiting a tax reform plan: Trump will call for cutting taxes for individuals and lowering the corporate rate to 15% when he unveils his plan Wednesday, according to a White House official
    • Geopolitical concerns persist after a U.S. nuclear-powered submarine arrived in South Korea on Tuesday as North Korea celebrated the 85th anniversary of its army
  • ECONOMY:
    • March new-home sales rose to 621,000 rate; est. 584,000
    • Richmond Fed’s April mfg. survey at 20 vs 22 last month
    • Home prices rose 6.4% y/y, according to a report from the Federal Housing Finance Agency
    • Home prices in 20 U.S. cities accelerated in the year through February for a fifth month, while nationwide property values also picked up, according to S&P CoreLogic Case-Shiller data reported Tuesday
  • EARNINGS:
    • After-market Tuesday: Chubb Ltd (CB), Edwards Lifesciences Corp (EW), Realty Income Corp (O), CH Robinson Worldwide Inc (CHRW), Stryker Corp (SYK), Illumina Inc (ILMN), Universal Health Services Inc (UHS), Discover Financial Services (DFS), AT&T Inc (T), Equity Residential (EQR), Boston Properties Inc (BXP), Juniper Networks Inc (JNPR), Wynn Resorts Ltd (WYNN), Capital One Financial Corp (COF), Arconic Inc (ARNC), Chipotle Mexican Grill Inc (CMG), Total System Services Inc (TSS), Texas Instruments Inc (TXN)
    • Pre-market Wednesday: Waste Management Inc (WM), Thermo Fisher Scientific Inc (TMO), TE Connectivity Ltd (TEL), Northrop Grumman Corp (NOC), Dr Pepper Snapple Group Inc (DPS), Rockwell Automation Inc (ROK), DTE Energy Co (DTE), Seagate Technology PLC (STX), PepsiCo Inc (PEP), United Technologies Corp (UTX), Anthem Inc (ANTM), WestRock Co (WRK), Wyndham Worldwide Corp (WYN), Ingersoll-Rand PLC (IR), Entergy Corp (ETR), Avery Dennison Corp (AVY), Nasdaq Inc (NDAQ), Baxter International Inc (BAX), State Street Corp (STT), Procter & Gamble Co/The (PG), Hershey Co/The (HSY), Boeing Co/The (BA), Hess Corp (HES), FLIR Systems Inc (FLIR), General Dynamics Corp (GD), Norfolk Southern Corp (NSC), Amphenol Corp (APH), Alaska Air Group Inc (ALK)
  • Europe Market
    • Stoxx Europe 600 Index rose 0.2% at the close in London
    • Technology stocks were among the biggest gainers, led by Austrian chipmaker AMS AG, up 20%

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